DuPont de Nemours (NYSE:DD)
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6 Months : From Jun 2019 to Dec 2019
By Austen Hufford
DuPont de Nemours Inc. said it expects organic sales to fall this year, the latest company to report weakness in industrial markets including car and electronics production.
The speciality-chemicals maker said Thursday that it expects the soft demand in many of its businesses to continue through the second half of the year.
"We are not counting on any improvement happening," Executive Chairman Edward Breen told investors.
Shares rose 1.3% in morning trading as the company beat earnings expectations for the quarter through price increases and cost savings. DuPont had $100 million of cost savings for the quarter and expects $450 million for the year.
DuPont, based in Wilmington, Del., emerged from the split-up of DowDuPont Inc. this year. DowDuPont spun off its materials-science business into a company now called Dow Inc. and its agriculture business into a company now called Corteva Inc. DuPont is the specialty-sciences portion of the company. Dow and DuPont agreed to merge in 2015.
Organic sales, which excludes currency movements and acquisitions, fell 3% in the company's second quarter with volume declines offsetting higher prices. The sales declines were spread across the U.S. and Canada, Europe and Asia. Sales in China were down 3% versus the prior year, compared to a 10% drop in the first quarter.
The company said it still expects research-and-development spending equal to about 4% of sales this year.
"We are not touching R&D just because we are seeing a little short-term softness," Mr. Breen said.
Sales volumes fell 12% in the company's transportation and industrial business due to lower car production and weak demand for electronics. The company also said its construction-products business was hurt by slower home construction in North America.
DuPont also said it has benefited from the rise of meat replacements because the company makes pea and soy proteins. Large restaurant chains, including Burger King and White Castle, have introduced new plant-based meat alternatives to their menus.
"We are pretty well positioned in that market," Chief Executive Marc Doyle said.
DuPont said it expects adjusted earnings for the year to be between $3.75 and $3.85 a share.
For the second quarter, DuPont had a net loss of $571 million, compared with a profit of $1.77 billion in the comparable period a year earlier. Its net loss was 76 cents a share compared with a profit of $2.27 a share a year ago. The loss was largely due to an impairment charge.
On an adjusted basis, the company said earnings were 97 cents a share, up from 89 cents a share. Analysts polled by FactSet were expecting adjusted earnings of 89 cents a share.
Net sales were $5.47 billion, down 6.6%. Analysts expected $6.02 billion.
--Allison Prang contributed to this article.
Write to Austen Hufford at email@example.com
(END) Dow Jones Newswires
August 01, 2019 10:44 ET (14:44 GMT)
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